Purchasing Function : An Organization

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Purchasing function is an organizational function, which involves the buying of raw materials and/ or services from an external supplier. According to Steele & Court (1996), purchasing is defined as “the process by which organizations contract with third parties to obtain the goods and services required to fulfill its business objectives in the most timely and cost effective manner.” Strategic purchasing includes ‘the ways in which the buying organization interacts with the supply market’. It takes into account both the current and future organizational aspirations. Organizations need to make careful consideration before finalizing on what suppliers’ goods or service the organization is interested in purchasing. The suppliers need to be approved and appraised at the product level, process level, quality assurance system level and organizational level. Purchasing function has evolved over the years from just a background function to one of strategic importance. Purchasing strategy ‘is concerned with developing a change programme designed to support business strategy and place purchasing at the heart of organization’. For those organizations that are keen on success, the purchasing function itself need to be strategically considered to be merged with the corporate strategy so that maximum benefit can be achieved from competitive advantage. (Glockner, Pieters and DeRooij 2005) This is essentially a continuous and extensive project which is directed towards the whole
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